Title: The Capital Markets Authority Achieves First Place for the Fourth Consecutive Year in Governance Principles Implementation

Kuwait, December 2, 2023 - Corporate governance principles are among the most essential pillars of sound management, and the Capital Markets Authority (CMA) attaches great importance to achieving these principles in line with Kuwait Vision 2035.  This vision includes the adoption of a comprehensive and effective governance system for the public sector at all levels. The CMA was guided thereby through implementing a self-governance system, consistently applying a full disclosure policy for its commissioners and employees, to prevent conflicts of interest and exploitation of inside information. This approach safeguards the interests of individuals associated with the CMA’s work, enhances trust, and aligns with its values. The CMA also implemented a system to continuously check and ensure compliance with these standards. 

Accordingly, for four consecutive years, the CMA successfully secured first place among independent budgets entities in meeting the governance requirements, achieving the highest percentage among all government entities. Nonetheless, the CMA aspires to achieve an even higher compliance rate of 100%.  However, certain legislative standards impede this objective, given the unique nature of the CMA as a quasi-judicial regulatory body with international links. Consequently, the CMA clarifies that all powers related to the implementation of the provisions of CMA’s Law, including preparation and approval of the Executive Bylaws and other regulations were assigned to its Board of Commissioners. The Board Members are responsible for carrying out executive functions, thereby distinguishing the regularization of CMA’s status from the other independent entities in Kuwait; legally, substantive, and procedurally. Since the members of the board are fully dedicated, their role extends beyond planning, supervising, and monitoring the implementation, unlike other independent entities. Therefore, the Chairman of its Board of Commissioners has been assigned the responsibility of the managing director, and the Board of Commissioners has been granted the authority to issue all resolutions for executing the provisions of CMA’s Law and its Executive Bylaws. The Chairman of the Board of Commissioners assuming the responsibilities of the managing director is in compliance  with the Law and its provisions, in accordance with the principle of the rule of Law. The principle of separation of positions, while applicable in shareholding companies, does not strictly apply to government institutions as the Chairman is not a stakeholder in the government institution, accordingly, he should consider the other persons of interests beside his personal interest, as the case may be in the shareholding companies.

CMA’s independence is a requirement imposed by the international organizations, of which the CMA became a member, and in their Board of Directors. Therefore, the legislator ensured the necessary independence for the CMA to perform its work by granting it legal, administrative, and financial independence, reaffirming the specificity of the CMA’s rules and regulations. The legislator explicitly states that “This Law is specific, and its provisions are specific. When implementing its provisions, each specific or general provision that may conflict with it shall be nullified”, ensuring compliance with international standards and financial evaluation and classification. In particular, fulfilling technical independence, in addition to the aforementioned independence, was made a fundamental requirement in capital markets’ regulatory entities. The legislator designated only the judiciary as the authority responsible for supervising the CMA in the event of the appeal against its resolutions or the resolutions of the Disciplinary Board.

In conclusion, the CMA values the role of the State Audit Bureau in rectifying the course towards optimal performance and extends its thanks and appreciation on their devoted efforts. This achievement would not have been possible without the support of the wise political leadership.

Ends-

Notes to Editors:
The Capital Markets Authority (CMA) of Kuwait was established pursuant to Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities, and its amendments, approved by the Kuwaiti Parliament in February 2010. Under this Law, the CMA regulates and supervises securities activities, ensures transparency, fairness, efficiency, and observes listed companies’ implementation of Corporate Governance regulations. The CMA also protects investors from unfair practices and violations of the CMA's Law.
Furthermore, the Law stipulates the supervision of mergers, acquisitions, and disclosure operations. The CMA also aims to provide awareness programs pertaining to securities activities.
For further information, please contact:
Public Relations & Media Office
Tel: 22903062
Fax: 22903505
Email: pr-media@cma.gov.kw